Occupation Rent
Author: Calgary Family Lawyer Mat Wirove
During a divorce, or separation, one of the most financially significant issues is dealing with the family home. In a lot of Alberta family law cases it is the single largest asset the parties have and usually there are other related issues to be determined like how will furniture and personal possessions be divided and who gets to live in the family home after separation. One issue that sometimes comes up is occupation rent.
So, what is occupation rent? At common law, joint tenants in a property enjoy equal rights to occupy the property. Neither co-owner has a right to exclude the other from the property. If one co-owner is forced out of the home, for example when one separating spouse moves out, the Court order the co-owner who remains in the home to compensate the other for the loss of the use and enjoyment of the jointly owned property. The amount of occupation rent is often the rental value of the property divided by the number of co-owners. The common law in this area has now been partly codified by section 17 of the Alberta Law of Property Act.
Normally, occupation rent is a discretionary remedy granted by the Courts in limited circumstances. Some of the factors the family law courts use in determining a claim for occupation rent are:
- If the spouse in possession of the matrimonial home lives there with the children and is not claiming child support or a contribution to matrimonial home expenses, such as the mortgage, insurance and taxes, an occupation rent claim by the non-occupying spouse is very likely to fail.
- Even where there are no children, if the occupying spouse does not claim reimbursement of expenses, the other spouse is unlikely to succeed with a claim for occupation rent.
- As a general rule, occupation rent may be used as a shield, not a sword. In other words, if the party in possession of the home claims contribution to expenses then the non-occupying party may claim occupation rent by way of response or defense to the claim for expenses. This concept is partly codified in section 17(g) of the Law of Property Act, R.S.A. 2000, L-7.
- Courts are sometimes reluctant to consider occupation rent at all in relation to family law disputes and prefer to apply principles of spousal support to appropriately compensate the parties.
- A party cannot bank his or her claim for occupation rent for years and years, and then claim a capitalized amount.
- A party must outline the claim for occupation rent in his or her court documents.
- An occupation rent claim may be denied where the matrimonial home increases in value while the occupying party is in possession. The Court may hold in these circumstances that the non-occupying spouse benefitted from exclusive occupation by the other spouse since the fact that the matrimonial home has remained in the possession of one of the parties has led to an increase in value. Therefore, denial of the occupation rent claim is seen to create no injustice.
- A claim for occupation rent will likely succeed if the occupying spouse has a tenant. The amount of the occupation rent will likely be a percentage of the rental funds received from other third-party tenant.
- Occupation rent is a discretionary remedy so a claimant must come to Court with clean hands. In other words, if they have behaved badly, not followed court procedures or court orders or if their conduct is otherwise blameworthy, the occupation rent claim is less likely to succeed.
It should also be noted that in the family law context, the traditional analysis of occupation rent may not always apply because of the obligations of child support or spousal support. In our experience, occupation rent claims in the family context are rare and infrequently successful. Generally, occupation rent claims are used to set-off claims for the carrying costs associated with the home including the mortgage, utilities and property tax.
Occupation rent is one issue in the matrix of family law claims associated with matrimonial property and support. If you have any questions after separation or divorce about occupation rent or matrimonial property division, the Calgary family lawyers at Crossroads Law are happy to be of assistance.
